The granting of consumer loans is increasing in Spain , although the value of interest is 3 points above the European average. And it is that more and more Spaniards decide to undertake future projects, unify debts or simply change cars.
Personal loans are also especially useful for the latter because, in most cases, they are cheaper than the brand’s own financing.
What are consumer loans?
They are financial products offered by a lender to a borrower, where an interest is charged for the money borrowed. This interest can be a percentage of the money borrowed or a personal good called a pledge. For example, pawning a personal object is a form of microcredit.
They are characterized mainly by being low-volume loans with interest exceeding mortgages. Its origin dates back much further than previously thought, since they began at the hands of the Jesuits as an alternative to the monopoly that the Jewish community had at the time, with interests ranging from 30% to 200%.
Requirements to request a loan
The requirements are varied and depend entirely on the lender , but they have a number of common characteristics that define them. As they are usually focused on the exchange for goods and services, they generally do not require a real estate guarantee, although they do require the present and future assets of the applicant. In the case of a pledge loan, the guarantee is a personal object. In a loan with a financial one, the guarantee can be a payroll or a declaration of property owned by the borrower.
The most common is that the requirements of a consumer loan are as follows:
✔ Have demonstrable income
✔ Not be on a delinquent list
✔ Have documentation such as DNI or NIE
Characteristics of consumer loans
The main features are as follows:
Minimum amount: usually around $ 500
Maximum amount: the maximum depends on each entity and the profile of each applicant
Term of return: It is the minimum term to return the amount borrowed together with the interests
Commissions: It is possible that the consumer loan has some commission of opening, cancellation, partial amortization…
And these are the main interests that define a consumer loan:
TIN: Nominal interest rate. It is the capital that the borrower adds to the amount borrowed as payment for the loan , and depends on two things: the agreed time for repayment and the will of the borrower.
APR: Effective annual rate. It is defined as the result of a mathematical formula that incorporates the nominal interest rate, commissions and term of the operation.
How to apply for a consumer loan?
Applying for a loan is getting easier, and the ways to do it too. Until a few decades ago it was necessary to appear in the entity and few were allowed to do it by telephone.
With the rise of the internet it has been simplified so that you can apply for a loan online immediately from your smartphone, and it is granted within hours. So if you are thinking of buying a car, do not hesitate to consult our credit institutions because the price of money has never been so low.